Power prices boosted 83% y-o-y in 2021 driving up Foresight Solar's revenue

• High power prices aided bolster Foresight Solar Fund's economic outcomes for 2021, the firm validated yesterday (9 March).

Adhering to the release of its Q4 2021 NAV update in February, the solar fund verified that because of strong UK power prices, above budget plan inflation and a decrease in discount rates, its NAV raised by 12.9% per share to 108.2 pence. This put overall NAV at to ₤ 660.0 million since 31 December 2021, up from ₤ 582.2 million in Dec 2020.

Power prices surged in the direction of the end of 2021 specifically due to a gas shortage that was driven by a number of elements, consisting of strong demand from Asia, decreased stocks and also recovering economic task adhering to the COVID-19 pandemic. This meant that the average power price achieved across Foresight's UK portfolio consisting of set price arrangements was ₤ 67.93/ MWh the company claimed, in contrast to ₤ 37.05/ MWh in 2020, a boost of 83% year-on-year.

Foresight's portfolio is comprised of 74% dealt with acquired revenue, as well as 26% vendor threat. Around 51% of its revenue came from aids and the continuing to be 49% from the sale of electricity.

Talking With Solar Power Portal, Ross Driver, director at Foresight Solar, claimed: "I believe the technique has actually paid dividends in 2021. By keeping about half of the electricity sales as merchant, where we might visualize an improving power price setting, we've gained from that."

These high power prices have influenced fixed revenues going forwards as well as supplying ample opportunity in the vendor space. For instance Dividend cover for 2021 was 1.21 x and for 2022 is forecast as 1.25 x based on acquired revenues alone.

" So we're not specifying the specific target right now [for our dividend cover], once you consider merchant solar prices for the year, at the degrees that we've been fixing up to about ₤ 240/MWh, you can obtain a suggestion of what the dividend cover will certainly be," added Driver.

Power prices have risen again in the very first few months of 2022, with the market coming to be significantly unpredictable in current weeks complying with the intrusion of Ukraine.

Driver stated that the business was not attempting to "2nd guess what the market's doing", however, however continuing to have a solid focus on contracted revenue, in particular corporate PPA's, which is an amazing growth location for the solar market in the UK at the moment.

" You have blue chip business that we're seeking, banks as well as government industry entities appearing. So all counterparties with high credit scores rankings. We think that there is an economic sector option and that solar in the UK does not call for subsidies for the following stage of development."

The company is aiming to advance its portfolio of projects throughout 2022, and also in February safeguarded a new three-year facilities agreement that consists of a fully commited multicurrency Revolving Credit Facility of ₤ 150 million and an uncommitted accordion facility of up to ₤ 30 million.